Gloomy outlook for the US electric car market: Tesla's stock price plummets, Ford Motor struggles to sell, and "new forces" warn of an industry massacre.

As global demand continues to slow down and competition intensifies, electric vehicle stocks in 2024 have had a difficult start and have been collectively abandoned by investors.

On Friday, Tesla narrowly avoided a second consecutive day of market decline, falling more than 1% in early trading, but rebounding slightly in the afternoon session to close up nearly 0.2% for the day. However, it is still close to the closing low since November 1st last year, with a cumulative decline of 14.6% since the beginning of the year.

After announcing a reduction in production of the all-electric pickup truck F-150 Lightning, Ford Motor fell 4% in early trading on Friday, but rebounded towards the end of the morning session to close up 1.9%. Due to poor sales, Ford Motor's stock price has fallen 20% in the past six months. Ford Motor warned that the growth of global electric vehicle sales in 2024 is not optimistic.

Stellantis, the new force in European car manufacturing, closed up 0.28% on Friday, but has fallen more than 6% so far this year. CEO Carlos Tavares warned on Friday that excessive price cuts by car manufacturers could trigger an industry "massacre".

In addition to the above three companies, the stock prices of most other prominent electric vehicle manufacturers continue to plummet.

American electric vehicle manufacturer Fisker fell 2.7% on Friday, with a 51.6% decline so far this year. "Tesla's rival" Rivian fell 1.7% on Friday, with a cumulative decline of 26.6% this year.

In terms of Chinese concept stocks, all three new car manufacturers have underperformed the broader market. Xiaopeng, NIO, and Li Auto fell 2.3%, 3.5%, and 2.3% respectively on Friday, with cumulative declines of 34%, 33%, and 25% respectively this year.

Stellantis: Beware of Price Reductions Triggering an "Industry Massacre"

Tavares stated that while the slowdown in global demand for electric vehicles is partly due to high prices, the profit margins for cars are already thin enough, and automakers should not lower prices.

"If you lower prices regardless of costs, it becomes a race to the bottom, which will ultimately lead to a bloody massacre. This is exactly what I want to avoid."

Tavares specifically mentioned Tesla. Over the past year, Tesla has repeatedly lowered prices to stimulate demand, sparking a fierce price war worldwide.

The result of trading price for volume is that Tesla's deliveries in 2023 increased by 38% YoY to 1.81 million vehicles, exceeding expectations. However, the company's profitability suffered, with net profit in the third quarter of last year dropping by nearly 44% YoY.

"I know a company that ruthlessly lowered prices, and their profitability also suffered a collapse," he said. "When you do this, you are jumping into the red ocean, and when you do this, the future becomes very difficult."

He stated that companies with sustained losses become "potential targets for integration" and added that Stellantis does not rule out the possibility of further acquisitions in the future.

Ford Motor's Most Popular Product Stalls, Expects Slower Global EV Sales Growth in 2024

A few hours before Tavares made his comments, Ford Motor announced a reduction in production of the all-electric pickup truck F-150 Lightning due to weak sales.

As one of Ford Motor's iconic products, the F-150 has been the best-selling pickup truck in the United States for many years, favored by American car owners for its reliability and long lifespan. In 2022, Ford Motor introduced the electric version, F-150 Lightning, which was seen as an important moment in the development of electric vehicles.

Affected by cost fluctuations, Ford Motor adjusted the price of the F-150 Lightning multiple times last year, first increasing and then decreasing, and slightly raising it again in early January this year.

Ford Motor CEO Jim Farley added, "We see a bright future for electric vehicles targeted at specific consumers," but Ford Motor "has the ability to mass-produce fuel and hybrid F-150 trucks according to customer demand."

Currently, Ford Motor has also scaled back its plans for battery factories, while General Motors and Tesla have temporarily halted some of their electric vehicle factory expansion plans.

Ford Motor expects that global electric vehicle sales will continue to grow in 2024, but at a slower pace than expected, due to consumers being unwilling to accept alternative products that are more expensive than gasoline-powered vehicles.

Fatigue in the European and American Electric Vehicle Markets

Last year, the market share of electric vehicles in the UK and the Eurozone declined, and sales growth in the United States slowed down, indicating signs of fatigue in the European and American electric vehicle markets.

According to data released by Kelley Blue Book, a research company under Cox Automotive, electric vehicle sales in the United States reached a record 1.2 million vehicles in 2023, accounting for 7.6% of the domestic automotive market, higher than the 5.9% in 2022. "Although record-breaking, the media's frequent reports of an economic slowdown are indeed real," said a Kelley Blue Book analyst. "The U.S. electric vehicle market is still growing, but not as rapidly."

Data shows that car sales in the U.S. in the third quarter of last year increased by 40% compared to the previous year, which is lower than the 52% growth in the fourth quarter of 2022.